506 U.S. 125 (1992), 91-1326, District of Columbia v. Greater Washington Bd. of Trade

Docket Nº:No. 91-1326
Citation:506 U.S. 125, 113 S.Ct. 580, 121 L.Ed.2d 513, 61 U.S.L.W. 4039
Party Name:District of Columbia v. Greater Washington Bd. of Trade
Case Date:December 14, 1992
Court:United States Supreme Court
 
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506 U.S. 125 (1992)

113 S.Ct. 580, 121 L.Ed.2d 513, 61 U.S.L.W. 4039

District of Columbia

v.

Greater Washington Bd. of Trade

No. 91-1326

United States Supreme Court

Dec. 14, 1992

Argued Nov. 3, 1992

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Syllabus

Section 2(c)(2) of the District of Columbia Workers' Compensation Equity Amendment Act of 1990 requires employers who provide health insurance for their employees to provide equivalent health insurance coverage for injured employees eligible for workers' compensation benefits. Respondent, an employer affected by this requirement, filed an action in the District Court against petitioners, the District of Columbia and its Mayor, seeking to enjoin enforcement of § 2(c)(2) on the ground that it is preempted by § 514(a) of the Employee Retirement Income Security Act of 1974 (ERISA), which provides that ERISA supersedes state laws that "relate to any employee benefit plan" covered by ERISA. Although petitioners conceded that § 2(c)(2) relates to an ERISA-covered plan, the court granted their motion to dismiss. Relying on this Court's decision in Shaw v. Delta Air Lines Inc., 463 U.S. 85, it held that § 2(c)(2) is not preempted because it also relates to respondent's workers' compensation plan, which is exempt from ERISA coverage, and because respondent could comply with the provision by creating a separate unit to administer the required benefits. The Court of Appeals reversed, holding that preemption of § 2(c)(2) is compelled by § 514(a)'s plain meaning and ERISA's structure.

Held: Section 2(c)(2) is preempted by ERISA. A state law "relate[s] to" a covered benefit plan for § 514(a) purposes if it refers to or has a connection with such a plan, even if the law is not designed to affect the plan or the effect is only indirect. See, e.g., Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139. Section 2(c)(2) measures the required health care coverage by reference to "the existing health insurance coverage," which is a welfare benefit plan subject to ERISA regulation. It does not matter that § 2(c)(2)'s requirements also "relate to" ERISA-exempt workers' compensation plans, since ERISA's exemptions do not limit § 514's preemptive sweep once it is determined that a law relates to a covered plan. See Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 525. Petitioners' reliance on Shaw, supra, is misplaced, since the statute at issue there did not "relate to" an ERISA-covered plan. Nor is there any support in Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, for their position that § 514(a) requires a two-part analysis

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under which a state law relating to an ERISA-covered plan would survive preemption if employers could comply with the law through separately administered exempt plans. Pp. 129-133.

292 U.S.App.D.C. 209, 948 F.2d 1317 (1991), affirmed.

THOMAS, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, BLACKMUN, O'CONNOR, SCALIA, KENNEDY, and SOUTER, JJ., [113 S.Ct. 582] joined. STEVENS, J., filed a dissenting opinion, post, p. 133.

THOMAS, J., lead opinion

JUSTICE THOMAS delivered the opinion of the Court.

The District of Columbia requires employers who provide health insurance for their employees to provide equivalent health insurance coverage for injured employees eligible for

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workers' compensation benefits. We hold that this requirement is preempted by the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U.S.C. § 1001 et seq.

I

ERISA sets out a comprehensive system for the federal regulation of private employee benefit plans, including both pension plans and welfare plans. A "welfare plan" is defined in § 3 of ERISA to include, inter alia, any "plan, fund, or program" maintained for the purpose of providing medical or other health benefits for employees or their beneficiaries "through the purchase of insurance or otherwise." § 3(1), 29 U.S.C. § 1002(1). Section 4 defines the broad scope of ERISA coverage. Subject to certain exemptions, ERISA applies generally to all employee benefit plans sponsored by an employer or employee organization. § 4(a), 29 U.S.C. § 1003(a). Among the plans exempt from ERISA coverage under § 4(b) are those

maintained solely for the purpose of complying with applicable workmen's compensation laws or unemployment compensation or disability insurance laws.

§ 4(b)(3), 29 U.S.C. § 1003(b)(3).

ERISA's preemption provision assures that federal regulation of covered plans will be exclusive. Section 514(a) provides that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" covered by ERISA. § 514(a), 29 U.S.C. § 1144(a). Several categories of state laws, such as generally applicable criminal laws and laws regulating insurance, banking, or securities, are excepted from ERISA preemption by § 514(b), 29 U.S.C. § 1144(b), but none of these exceptions is at issue here.

Effective March 6, 1991, the District of Columbia Workers' Compensation Equity Amendment Act of 1990, 37 D.C.Register 6890, amended several portions of the District's workers' compensation law, D.C.Code Ann. §§ 36-301

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to 36-345 (1981 and Supp.1992). Section 2(c)(2) of the Equity Amendment Act added the following requirement:

Any employer who provides health insurance coverage for an employee shall provide health insurance coverage equivalent to the existing health insurance coverage of the employee while the employee receives or is eligible to receive workers' compensation benefits under this chapter.

D.C.Code Ann. § 36-307(a-1)(1) (Supp.1992). Under § 2(c)(2), the employer must provide such health insurance coverage for up to 52 weeks

at the same benefit level that the employee had at the time the employee received or was eligible to receive workers' compensation benefits.

36-307(a-1)(3).

Respondent Greater Washington Board of Trade, a nonprofit corporation that sponsors health insurance coverage for its employees, filed this action against the District of Columbia and Mayor Sharon Pratt Kelly seeking to enjoin enforcement of § 2(c)(2) on the ground that the "equivalent"-benefits requirement is preempted by § 514(a) of ERISA. The District Court granted petitioners' motion to dismiss. App. to Pet. for Cert. 21a. Petitioners conceded that § 2(c)(2) "relate[s] to" an ERISA-covered plan in the sense that the benefits required under the challenged law "are set by reference to covered employee benefit plans." [113 S.Ct. 583] Id. at 22a. Relying on our opinion in Shaw v. Delta Air Lines Inc., 463 U.S. 85 (1983), however, the District Court held that § 2(c)(2) is not preempted, because it also relates to respondent's workers' compensation plan, which is exempt from ERISA coverage, and because respondent could comply with § 2(c)(2) "by creating a `separate administrative unit' to administer the required benefits." App. to Pet. for Cert. 24a (quoting Shaw, supra, at 108).

The Court of Appeals reversed. 292 U.S.App.D.C. 209, 948 F.2d 1317 (1991). The court held that preemption of

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§ 2(c)(2) is compelled by the plain meaning of § 514(a) and by the structure of ERISA. Id. at 215-216, 948...

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